Where does all the money for political parties come from, Iftekharuzzaman asks

A political party with a full organisational structure extending down to the union level across the country may need Tk 3.02 billion to Tk 3.93 billion annually to run its offices and activities. The estimated annual cost could rise to Tk 15.32 billion to Tk 21.88 billion if its organisation extends to the ward level.

However, there is a significant gap between these estimated operating costs and the income and expenditure figures disclosed by political parties.

The findings were revealed in a study by Transparency International Bangladesh (TIB).

The research report, titled “Institutional Governance of Political Parties in Bangladesh”, was released at a press conference at TIB’s office in Dhanmondi, Dhaka, on Sunday.

According to the study, the potential income from regular membership fees falls far short of the estimated cost of running political organisations. To bridge the gap, political parties rely on both formal and informal sources of funding.

At the local level, party activities are largely financed by local leaders and wealthy individuals. However, such expenditure is generally not reflected in the parties’ official financial statements.

Speaking at the press conference, TIB Executive Director Iftekharuzzaman said political parties require substantial funds to operate under the existing political culture.

Stating that the money is often managed through informal, largely individual-dependent arrangements, leaving considerable room for a lack of transparency, he said, "As a result, there is a significant gap between parties’ official financial statements and their actual expenditure."

Iftekharuzzaman also said abuse of power, black money and the criminalisation of politics were fuelling internal conflicts within influential political parties.

In many cases, political participation or party affiliation has turned into a “power-centred business model”, he added.

Based on information collected from leaders and activists of different political parties, TIB estimated the annual costs of maintaining party offices and conducting organisational activities. The study presented three estimates based on the extent of a party’s organisational network.

Under the first scenario, a party with the minimum organisational structure required for registration, including offices in 22 districts and 101 upazilas or police stations, would need Tk 140 million to Tk 250 million annually.

Of this amount, Tk 55 million to nearly Tk 70 million would be required to maintain offices, while Tk 85 million to Tk 180 million would be needed to organise political programmes.

Under the second scenario, a party with a full organisational structure extending across all 64 districts and 4,553 unions would require an estimated Tk 3.02 billion to Tk 3.93 billion annually.

This would include Tk 840 million to Tk 1.14 billion for office operations and Tk 2.18 billion to Tk 2.79 billion for organising programmes.

Under the third scenario, where the organisation extends down to the ward level within unions, the annual expenditure could reach Tk 15.32 billion to Tk 21.88 billion.

The estimates take into account the costs of maintaining offices at different levels, organising meetings and rallies, publicity campaigns, transportation and organisational coordination.

For office operations, the study considered regular expenses such as rent, electricity, water and hospitality. For political programmes, it assumed a minimum of five events a year.

TIB noted that actual costs could vary depending on whether party offices are owned or rented, as well as the nature, location and timing of political programmes.

The declared sources of income for political parties include membership fees, donations and revenue from organisational activities. TIB also assessed whether parties could sustain their operations relying solely on membership fees.

Based on the membership numbers and fee rates specified in the constitutions of two political parties included in the study, a party meeting the minimum registration requirements could generate around Tk 2.6 million annually from membership fees.

However, the estimated annual expenditure for maintaining an organisation of that size ranges from Tk 140 million to Tk 250 million.

Similarly, a party with a full organisational structure extending to the union level could generate around Tk 375 million a year from membership fees.

For a party with an organisation extending down to the ward level within unions, the estimated annual income from membership fees could reach Tk 1.16 billion.

The findings suggest that membership fees alone are insufficient to finance political parties with extensive organisational networks.

TIB clarified that these figures represent estimated income and expenditure, not the actual financial accounts of any particular political party. Donations, nomination fees, special fundraising initiatives and other sources of income were not included in the membership-based revenue estimates.

The study found that political parties' fundraising and financial management largely depend on individuals.

Most parties collect money on an ad hoc basis to meet expenses related to meetings, conferences, political programmes, movements and elections.

At the local level, party offices, rallies, transportation for activists and other organisational activities are often financed by local leaders. Consequently, such expenditure is not reflected in the central financial accounts of the parties.

According to the study, businesspeople and wealthy individuals play a particularly important role in financing parties that are in power or have the prospect of coming to power.

In some cases, money is extorted from them. Others contribute substantial amounts in the expectation of securing party positions, electoral nominations or future benefits.

TIB said this financial dependence creates patronage-based relationships within political parties. As a result, economically influential individuals and groups gain opportunities to influence party decisions, candidate nominations and organisational activities.

Some political parties, meanwhile, collect funds at the grassroots through public donations or crowdfunding. Parties also generate income by selling nomination forms and publications, as well as from party-owned properties.

The study observed that substantial financial demands, coupled with the lack of transparent funding mechanisms, create risks of political corruption and the politicisation of crime.

TIB highlighted a significant discrepancy between political parties' declared financial statements and their estimated organisational expenses.

The study analysed the 2025 financial statements of four political parties published in different media outlets.

Their declared annual income ranged from Tk 18.2 million to Tk 236.8 million, while reported expenditure ranged from around Tk 18.7 million to Tk 239.1 million.

According to TIB, these figures are extremely low compared with the actual costs of national-level political programmes, organisational operations and electoral activities.

However, the organisation noted that the declared financial statements of the four parties cannot be directly compared with the estimated operating costs calculated for different organisational structures.

The study also found that none of the political parties has a comprehensive and independent financial policy or financial procedures.

Parties do not regularly prepare annual budgets either. Although most party constitutions briefly mention sources of income and expenditure, they lack detailed provisions on fundraising, expenditure approval, fund management, internal controls and accountability.

Under existing laws, registered political parties must submit audited financial statements to the Election Commission every year.

However, TIB found that such audits often remain a formality. Actual financial transactions, sources of income and expenditure are not adequately reflected in audit reports.

The study also cited instances where newly formed or smaller political parties submit nominal or fabricated audit reports for fees ranging from Tk 20,000 to Tk 25,000.

The disclosure of financial information by political parties is also unsatisfactory.

None of the websites of the 16 active political parties reviewed in the study published annual financial statements or details of electoral expenditure.

Moreover, financial reports submitted by political parties to the Election Commission are not regularly made public, limiting people's access to information about the actual sources of party funding and how the money is spent.

To ensure transparency and accountability in political financing, TIB recommended making the public disclosure of financial statements mandatory for all political parties.

It also called for all income and expenditure at both central and local levels to be included in party accounts, financial transactions above a specified threshold to be conducted through banks, and standardised accounting systems to be introduced.

The organisation further recommended empowering the Election Commission to scrutinise audited financial statements submitted by political parties and ensuring that audits are conducted by listed chartered accountancy firms.

Speaking at the press conference, Iftekharuzzaman said the July movement had raised expectations of an end to power-centred politics, but that change had yet to materialise.

Power-driven politics continues due to a lack of good governance within political parties, the use of money and muscle power, and a lack of accountability, he said.

He said political parties themselves must take responsibility for institutional reforms.

The TIB executive director stressed that party leaders must review their own activities to secure the future of democracy and regain public trust.

The research report was presented at the press conference by TIB Senior Research Fellow Md Julkarnayeen, Research Associates Kawsar Ahmed and Kazi Aminul Hasan.

Also present were TIB Adviser-Executive Management Professor Sumaiya Khair, Director of the Research and Policy Division Muhammad Badiuzzaman and Director of Outreach and Communication Mohammad Touhidul Islam.